]]>The high-fives must have been flying at Amazon this morning: millions of the company’s customers got notices to spend credits at its Kindle store, and Amazon didn’t have to pay a cent. Meanwhile, rival Apple will likely underwrite an even bigger shopping spree for Amazon customers sometime yet year.

Welcome to the ironic denouement of l’affaire ebooks, which reached a climax in 2013 when a federal judge found that Apple had brokered a conspiracy with book publishers to fix prices. The legal tussle resulted in the publishers settling their cases — which is what paid for the customer credits that went out today — while Apple fought on alone.

For now, the biggest winner is Amazon, which already dominated the ebook market at the time of the price-fixing scheme in 2010. Today, as a result of lawsuits brought by the Justice Department and state governments, Amazon is in an even stronger position with the publishers; it will also get a healthy cut of the $160 million or so that the publishers agreed to pay under a settlement.

As part of the settlement, ebook customers received credits to their Amazon Kindle, Barnes & Noble or Google Play accounts. While all this cost the publishers a pretty penny, they didn’t make out so badly since much of the money they paid out will come right back to them as customers use their credits to buy new ebooks. Meanwhile, the retailers — most of all Amazon — will collect their usual commission.

For Apple, which chose to fight rather than settle, it’s a whole different story. Right now, the company is in the midst of high legal torture at the hands of a hostile judge, class action lawyers, state attorneys general and the Justice Department.

Recent court records show that the class action lawyers and the states want Apple to pay damages of $280,254,374; they will then seek to triple that amount under special penalty provisions — which would result in a final bill close to $1 billion. The damages trial is set to start in May and, if Apple loses, consumers (and indirectly Amazon) can expect to receive another bushel of ebook credits next year.

Meanwhile, Apple is waging an uphill fight against the Justice Department to overturn last year’s anti-trust verdict. Currently, the company is waiting for its appeals court trial to begin, and is also asking for a change of venue in related proceedings to get away from the clutches of Judge Denise Cote, who has been openly hostile to Apple — even requiring the company to pay for a monitor, who is reputedly Cote’s friend and colleague, to investigate itself.

The whole business is starting to look absurd, especially as Apple remains a marginal player at best in a world where Amazon is still dominant. While Apple deserves some of the blame, not least for its ongoing intransigence, it’s also about time for the states and the Justice Department to find another target.

]]>If you’re hoping to buy an e-book for someone that doesn’t live an Amazon-centric life, you now have a new option. Apple has finally added to the ability to gift e-books from its iBookstore.

It’s a little surprising that it has taken this long, actually, since Amazon has offered this option for its Kindle titles for years. And Apple already lets you gift other digital content, like apps and music. Either way, this is still a convenient new feature for last-minute shoppers.

You can schedule an e-book delivery for a specific date, in case you want to order now but make sure your gift doesn’t arrive until Christmas morning. And similar to Apple’s other digital stores, you can only send e-books within your country.

The new gifting function works on both the iOS and OSX iBookstore apps. Simply find the title you want, select Gift from the share button in iOS or the menu in OSX, and enter the information for your intended recipient.

]]>Authors and publishers need to know how and where their books are selling in order to target readers and time promotions. Yet keeping track of and analyzing all the data that comes in from retailers like Amazon and Apple can be difficult, especially for publishers with large lists of books.

App Annie, a San Francisco-based company that provides app developers and publishers with analytics about app sales, rankings and trends, aims to solve the problem by automating aggregation and analysis of ebook sales in the same way it has for apps. (In the app world, it’s become a leading provider of that type of analysis: The company says that over 300,000 app publishers, including 90 percent of the top 100 grossing iOS publishers, use its tools.)

App Annie plans to announce Tuesday that it’s expanding into ebook analytics. It will provide publishers with two free products: An Analytics tool that lets publishers track sales and download data from the Kindle Store and the iBookstore into one dashboard, and a “Store Stats” tool that lets them view ebook market trends across a database of about a million titles.

“We’ve spent the last few months with major book publishers and influential writers, asking them about how they understand their data,” Oliver Lo, App Annie’s VP of marketing, told me. In general, the company found, publishers download their data from ebook retailers and aggregate it in Excel. But analyzing the data correctly can require “some Excel genius in the company,” and even publishers who have such a person or team likely find the process time-consuming.

To start, publishers or self-published authors log into App Annie and connect their Kindle and iBookstore accounts. (Traditionally published authors, who don’t have access to their direct sales rankings through retailers, won’t be able to log into App Annie. Soon, though, App Annie is adding the ability for publishers to share analytics reports with authors and other people within the company.) App Annie then pulls the retailer’s sales data for each of its titles into a dashboard, so that publishers can view each title’s sales (and refunds), revenue, price, star ratings and retail store rankings over time. Because they can see exactly when a book’s price changed, they can also see the effects of a price promotion on sales both at the time of the promotion and afterwards.

These are all things that publishers can do themselves if they have the tools and time. But App Annie automates the process and makes it easier for publishers and authors that lack data-crunching skills to see how their books are performing over time.

I asked Lo if he fears that Amazon or Apple will cut off third-party access to the ebook data. He said the company isn’t worried about that because the retailers haven’t cut off access to app data, and “the technology involved [for ebooks] is exactly the same for apps.” In addition, “some of those platforms are our customers.”

That’s a reference to App Annie’s third product, a paid market data tool that counts Google and Microsoft among its subscribers. A premium product like that isn’t in the works for book publishers yet, but App Annie may roll it out at some point if the free tools gain enough users. In addition, the company says it will eventually expand to other ebook retail platforms like Barnes & Noble and Google.

“Publishers are starting to realize that for them to be successful in this space, they need to learn a lot from how app and game publishers have extended their businesses and their business models,” Lo said. “Analytics and data need to become a core part of [book publishers’] culture.”

Open Air sells 10 to 30 times more books through the App Store than through the iBookstore. Open Air started out only publishing its titles as iPad apps and selling them in the App Store. Then, when Apple launched its publishing platform iBooks Author, Open Air decided to adapt its titles for the iBookstore and for Kindle.

“We thought being on iBooks and Amazon would be a huge multiplier,” Feldman said. “What’s actually happened is that we’ve seen that the App Store is a massive channel with 10 to 30 times the sales of the iBookstore.” Open Air’s bestselling title, Master Your DSLR Camera, sells thousands of units per week on the App Store, compared to a few hundred on other platforms. (About 60 percent of those sales come from Kindle and 40 percent come from the iBookstore; while Open Air’s titles are available on other platforms like Nook, sales there are tiny.) “Even on days when a book is being featured by Apple in the iBookstore and not being featured in the App Store, we see the same ratio,” Feldman said.

Competing against games and utility apps

Master Your DSLR Camera can sell just 10 copies a day and still hit the No. 1 ranking in the Photography category of the iBookstore, Feldman said. On the App Store, by comparison, DSLR Camera sells 150 copies a day in the U.S., “which puts us into the top 7-10 range in the Photo & Video category and 200-300 overall.” (Open Air also sells books in other countries.)

“The challenge is that the App Store rankings are optimized for games and utilities,” Feldman said. “It isn’t a place where one can go and browse for books on wedding or books on parenting. It’s very hard to properly position high-quality content as being high-quality content.”

The App Store “values high quality,” Feldman said, “so built into our products, we encourage readers to write reviews and give a rating. It’s a virtuous cycle. Now, if you type DSLR into the App Store, we’re the No. 1 result.”

What should Apple do better?

Why the discrepancy between the App Store and the iBookstore? Feldman suggested it’s because customers still don’t really understand what the iBookstore is, and don’t do much browsing or discovery there. When Open Air’s customers visit one of the company’s landing pages for a book, when they are given the option of choosing an iBooks version or an app version, “we see much higher conversion rates on that traffic in the App Store,” Feldman said, even though the books are “substantially similar in terms of content” and the user presumably already has an iTunes account that allows him or her to purchase from either the iBookstore or the App Store.

In iBooks Author, “Apple has the most interactive [ebook] format of the book retailers,” Feldman said. “But it hasn’t done enough to educate customers that that exists. iBooks Author is very known in the industry as a format, but customers are still expecting a text file” when they go to the iBookstore. “On the contrary, when they go to the App Store, they are expecting a highly interactive experience.”

That’s not the only factor. The discrepancy might be caused by the fact that iBooks isn’t a default app on iOS devices the way the App Store is, and many users won’t know to download it. In addition, iBooks will be available for desktops when the next version of Mac desktop software, OS X Mavericks, is released this fall. At that point, iBooks might attract more users.

A focus on ebooks as apps, but testing other platforms

Open Air’s success in the App Store “really got us thinking that instead of second-guessing App Store distribution, it should be an area of focus,” Feldman said. But that doesn’t mean that the company isn’t taking advantage of other platforms, like Kindle, as “an area of discovery and testing.”

In fact, Open Air just released its newest title, Investing Made Easy: A Beginner’s Guide to Growing Your Money, as a text-only Kindle book. It’s not yet available in the App Store. On Kindle, the ebook is $4.99 (and free in the Kindle Owners’ Lending Library), and Feldman describes it as a “minimum viable book.”

“We want to explore how users are finding the content and where they’re struggling or requiring further information,” Feldman said. “The customer tracking is “necessarily low-tech because of Amazon’s format” — Open Air built some links into Investing Made Easy, but it’s also relying on the user comments on the book’s Kindle page. When the company has gathered enough customer data, “we hope to be able to to invest in interactive [features] and videos” and release an app version of Investing Made Easy.

Open Air is also working on Android app versions of its titles now, and Feldman said he hopes that being in the Amazon Appstore will lead to discovery on Amazon’s website. “The goal is to have interactive experiences for Kindle Fire users, and any Android tablet.”

Advice to publishers: “Carve out a digital-first division”

“I don’t think that publishers think about apps as books,” Feldman said. “I think often when they think about apps, they think about extensions” of an existing brand — “like a What to Expect iPhone app where you can see your baby as the size of a fruit.” But as Open Air has seen, the App Store can be “a great place for full-length narrative nonfiction.”

For publishers to release books like Open Air’s, though, they can’t start with print. “My advice for publishers would be to carve out a digital-first division that would allow them to play in that space without having to think about Barnes & Noble or a shelf or a piece of paper at all,” Feldman said. (In fact, many publishers are experimenting with digital-first fiction lines — but those books are entirely text-based.) Then “take some digital bestsellers and see if there’s a print version that could be made downstream.”

So is Open Air thinking about print at all? In fact, Feldman said, they are. “It’s not something I’m interested in building for first,” he said. “But it could make sense — for our photography book, I think it may.” If Master Your DSLR Camera were released as a print book, Open Air might provide a web login so that users could access the interactive content. “It would certainly widen distribution,” Feldman said, “but at the cost of what is really unique about our books.”

]]>U.S. vs. Apple resumed in New York Monday after a three-day break. Amazon executives, plus Google’s Tom Turvey, had testified Thursday; Monday brought testimony from HarperCollins CEO Brian Murray and Macmillan CEO John Sargent, both appearing as government witnesses. A roundup of the day’s proceedings:

The day “provided more examples that publishing CEO’s are not necessarily very helpful or illuminating witnesses for the government,” Publishers Marketplace notes. HarperCollins CEO Brian Murray said without pressure from News Corp executives (as a reminder, News Corp is the parent company of HarperCollins), he likely would not have signed an agency agreement with Apple in January 2010 before the iBookstore launched: “If I was making this decision at this point in time for only HarperCollins, I would not sign the deal. I would have waited and continued to negotiate…I thought the best chance of me getting good terms with Apple was if I was able to engage Amazon or Barnes and Noble in a conversation at the same time, and both of them had told me they were not ready to begin a discussion.”

One of the government exhibits was an email exchange in which News Corp CEO Rupert Murdoch told Murray he wanted to “screw Amazon,” after Amazon announced that it would offer authors a 70 percent royalty through Kindle Direct Publishing (essentially the same terms as an agency model). “That move infuriated a number of publishers,” reports Publishers Weekly, “including Murdoch, apparently, who saw the move as a threat from Amazon and more proof that Amazon would one day seek to woo publishers’ authors directly.”

HarperCollins negotiated an “Author Outs” provision with Apple, reports the New York Post, “which meant not all new releases would sell under the agency model” if an author didn’t want to, but it’s unclear whether this option has ever been exercised.

Macmillan CEO John Sargent told DOJ attorney Mark Ryan ” he never believed Sony could compete, doubted whether Barnes & Noble could succeed as a device-maker, and said that Google, while great at search, is a terrible retailer,” Publishers Weekly reports. And “Sargent also made no bones about what Macmillan hoped to accomplish with Amazon. ‘Typically one party controls price, and one party controls availability. Amazon wanted both. And we were going to force them to choose one or the other.'”

On Tuesday, Sargent will complete his testimony, followed by either Hachette CEO David Young or Apple director Keith Moerer. On Wednesday, the government’s expert witnesses are expected to testify, and Apple SVP Eddy Cue is set to take the stand Thursday.

If you want some separate background reading in the meantime: Gordon Crovitz has a Wall Street Journal editorial that describes the ebooks case as “Exhibit A in the case against market meddling,” and The Verge profiles Apple’s lead counsel Orin Snyder, writing, “Snyder is not yet the household name that David Boies or Alan Dershowitz are, but he’s speeding in that direction.”

]]>Starting this fall, Apple’s iBooks are no longer limited to reading on iPhones and iPads. The iBookstore is getting its own dedicated Mac app with the launch of the new OSX Mavericks operating system, Apple announced at its WWDC conference in San Francisco Monday.

Users will be able to purchase and read books directly from the Mac app. (There are now 1.8 million titles in the iBookstore, Apple said, up from 1.5 million in October 2012.) The app could be particularly useful for students, who could have a textbook open on their computer while they take notes.

Amazon has Kindle reading apps for PC and Mac, though you can’t purchase ebooks through the apps. Nook has a Windows 8 app that allows purchasing and reading, but doesn’t have a Mac app.

]]>As part of its Mac and iPad mini event on Tuesday, Apple also unveiled iBooks 3. It’s free, and it’s the first significant update to the ebook software since January. The big new features include a new scrolling view, a Collection to easily view books you’ve purchased (as opposed to side-loaded), and better way to share passages of books via social networks. I’m going to take you through each of the new features, and give you my thoughts on them.

Scrolling view

You can access the new scrolling view by tapping on the “aA” icon in the upper-right corner, choosing Themes, and then tapping on Scroll. Now, instead of tapping on the screen edges to turn the page, you can just scroll up to keep reading. If you use Instapaper at all, it works just like reading in that app.

The chief problem I have with this view is it felt like I was reading a run-on page. Maybe I’m old-fashioned, but my eyes and brain are used to the brief rest that comes with turning the page. Simply put, I did feel myself freaking out a bit when the page went on way longer than I expected. My initial experience was so displeasing that after vowing to give it a solid chance, I just gave up. There are location numbers in the left-hand margin so you can get a vague sense of when page numbers change, but I would like it better if there was also a thin horizontal rule to mark the location changes.

I don’t think the new view is completely useless, though. An ideal use would be reference texts where you need to view a section of text than spans over two pages. For general reading, however, I still find the tap-to-turn method the best. Also, while Apple has said it’s tweaked iOS to detect accidental thumb pressed with the iPad mini, the scrolling text view could be a guaranteed way to make sure you don’t suddenly jump ahead 20 pages.

Purchased Collection

I don’t buy a lot of books via iBooks — Amazon, for the time being, is still my chosen purveyor of reading materials — but recently I needed to look at a book I’d bought through the iBookstore previously. To read it, I needed to go the iBookstore, choose Purchased, and then redownload it from there. It felt like a few steps too many.

I know, I know. I suffered.

One thing Amazon’s Kindle app has done better than iBooks is how it handles books in the cloud. You just click on the Cloud tab and you view a library on non-downloaded books. Now, iBooks works the same way. Go to your Collections list, choose Purchased, and boom, your Books in the Cloud are there.

Unfortunately, one area Amazon still eats Apple’s lunch is how it handles sideloaded content. You can upload damn near anything to your Personal Documents section on Amazon and download it to your various Kindle apps. Apple only supports this feature for books you buy through the iBookstore. If you sideload a lot of content to iBooks (guilty) you still need to use iTunes to sync it to your iOS devices.

Now, that’s suffering.

Sharing passages

Every now and then, I tweet a book I’m reading (or just finished reading). Maybe it’s the bibliophile’s version of sharing what I ate for lunch. How I’d expect a sharing feature to work in a books app is to tweet, Facebook, or whatever, a book I’m reading, some general thoughts, and a shortened link to the book in the retailer’s store.

That’s not how it works in iBooks.

Instead, you highlight a passage, tap Share, and that passage along with your commentary are shared. I rubbed my temples at the various types of passages that may be shared with me on Twitter and Facebook since I have friend with odd tastes in reading.

As with the scrolling text, I’m going to say this feature is the most relevant to people reading texts that need to share passages with others via email. When I was in school, I’d need to share parts of scientific texts with group mates. Schools, book clubs, religious study groups, etc. could find this handy for sharing amongst themselves.

Afterward

I’d put a side bet with myself that we’d see an iBooks update on Tuesday. What with the rumor mill and all, I felt it was easy money. It’s a good thing there wasn’t a point spread, though.

Because while testing these new features out, my thoughts kept tracking along the lines of: this is a full version release? It felt like it should have been called iBooks 2.5; not iBooks 3. Maybe there’s more coming in future dot releases, especially once iTunes 11 is released.

]]>At Tuesday’s iPad mini event in San Francisco, Apple announced an update to iBooks, its ebook reading platform. The company is also reportedly expanding the iBookstore to 18 more countries in Latin America, including Brazil, as well as New Zealand. That makes the iBookstore available in a total of 50 countries.

Overall, the iBookstore contains 1.5 million books that have been downloaded 400 million times so far, Apple CEO Tim Cook said. The main changes to iBooks — which isn’t updated in the iTunes Store as of this writing, but will be today — are a continuous scrolling option for ebooks (so you can just flick instead of turning virtual pages — a feature readers may or may not care about) and better integration with iCloud so that ebooks sync across devices. You can tap to share a passage on Facebook or Twitter. The company also added support for Korean, Chinese and Japanese, bringing the total number of languages supported to over 40, according to Cook.

In addition, Apple’s self-publishing platform iBooks Author, which lets users create graphics-rich ebooks (like textbooks) for iPad, is being updated. It gets new templates, the option to create portrait-only (as opposed to landscape) books and other customization options.

]]>Apple would prefer agency pricing on ebooks — that, we know. In fact, Apple is likely to appeal the DOJ’s ebook pricing settlement with HarperCollins, Hachette and Simon & Schuster, which was approved last week. Turns out, though, that doesn’t mean Apple won’t play the price-drop game on their ebooks in the meantime.

We saw yesterday that HarperCollins has already entered into new contracts with ebook retailers like Amazon, Barnes & Noble and Google. Now Apple has a new deal with HarperCollins too. This morning I compared the prices of 12 HarperCollins titles across ebook retailers. Like Amazon, Apple is selling new bestselling ebooks for $9.99. (I’ve asked Apple for a comment on its pricing strategy for ebooks and will update this post if I hear back.)

Amazon is already dropping its ebook prices to match Apple’s, in the cases where Apple had priced a book lower than Amazon did. For instance, James Rollin’s Bloodlines and J.A. Jance’s Judgment Call were each $10.94 in the Kindle Store this morning and $9.99 in iTunes. Just a few hours later, both books are down to $9.99 at Amazon as well.

Sure, we can’t draw major conclusions about Apple’s new ebook pricing strategy based on what it’s done with one publisher’s books. But in the case of HarperCollins, we’re already seeing that even if Apple would prefer agency pricing, price bands and MFNs for books, it’s willing to compete on price in the absence of those things. And it has a lot more money to do so than other ebook retailers like Barnes & Noble and Kobo.

Under agency pricing, Apple’s ebook market share hovered around 10 percent. But if customers are drawn to Apple’s new low prices on ebooks, it’s actually possible to envision a world in which Apple’s ebook market share rises — under the terms it didn’t want.

]]>Digital self-publishing site Smashwords has launched a new service, Library Direct, that lets some libraries acquire large collections of Smashwords ebooks.

To start, the three library systems using the program are Colorado’s Douglas County libraries, California-based library network Califa and Internet Archive’s free online library Open Library. In order to work with Library Direct, the libraries have to operate their own ebook lending systems. (Smashwords works separately with digital library distributors Baker & Taylor and 3M Cloud.)

Previously, most libraries relied upon published reviews to guide their acquisition decisions. Under the Smashwords model, the curation is crowdsourced based on aggregated retail sales data drawn from across the Smashwords distribution network which includes the Apple iBookstore, Barnes & Noble, Sony, Kobo, the Diesel eBookstore and others.

Qualifying libraries can select from the top 10,000, 20,000 or any other large number of titles, and can custom-filter the titles by category and price range.

Douglas County, Califa and Open Library will each acquire “some variation” of Smashwords’ top-10,000 bestselling titles, with the three deals totaling around $100,000.

About 45,000 authors and indie publishers work with Smashwords. They can opt out of Library Direct, but they won’t know if their book has been included in the program until it shows up in their Sales and Payment report. “We don’t reveal sales rank on the site, though I suppose now might be a good time to reconsider that,” Smashwords founder and CEO Mark Coker acknowledged in the comments.